It has been several months since the FTX ordeal occurred. While Sam Bankman-Fried remains detained under house arrest, a plethora of revelations regarding the exchange’s expenses under his leadership have been surfacing. John Ray, the current FTX CEO, who is also serving as the restructuring chief, provided a comprehensive account of the alleged misappropriation of customer funds. In a recent report, he presented a breakdown of how these funds were utilized.
Ray’s statement revealed that former executives of FTX, including SBF, conducted a series of transactions through the FTX Foundation, which operated as a nonprofit organization. Surprisingly, these transactions amounted to a substantial $700,000 under the guise of grants. $400,000 of these funds were allocated to an entity responsible for producing animated YouTube videos. These videos were related to “rationalist and effective altruism material.” Additionally, a separate grant of $300,000 was provided to an individual tasked with writing a book. The book delved into the topic of deciphering the utility function of humans.
All these “grants” utilized customer funds of the exchange. Alameda Research has served as a prominent wing of FTX. Ray went on to allege that these funds were siphoned into various bank accounts. The accounts were under the control of FTX, Alameda Research, along with several others.
FTX’s bizarre inclination toward properties
FTX’s former chief and executives demonstrated a significant focus on real estate investments, with an astonishing amount exceeding $243 million allocated to different properties. The list of holdings includes both noteworthy and peculiar assets. Among them, the “Pineapple House,” valued at $1.8 million, has garnered attention within the community due to its distinctive nature.
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Additionally, the portfolio encompassed the inclusion of the renowned penthouse situated within the Albany resort community in Nassau. This specific penthouse, spanning six bedrooms and occupying an expansive area of 11,500 square feet, served as the living quarters for FTX founder Sam Bankman-Fried and fellow colleagues, including Caroline Ellison, Nishad Singh, Gary Wang, and other individuals.
Furthermore, FTX invested more than $18 million in properties located in the Bahamas known as the “Albany Honeycomb” units. FTX’s new CEO further commented about the exchange’s extravagant spending and said,
“The image that the FTX Group sought to portray as the customer-focused leader of the digital age was a mirage.”